Ranjit Boparan, Tesco's main chicken supplier, is set to take over Northern Foods after tabling an improved £342m bid for the Goodfellas pizza maker just minutes before a deadline laid down by the City's Takeover Panel expired.
Northern Foods last night said its board was unanimously recommending the offer, worth 73p a share. Anthony Hobson, Northern's chairman, said: "Today's bid from Boparan is a compelling opportunity for our shareholders to realise a cash exit."
The move breaks up a merger between Northern and the Irish group Greencore that was agreed in November. Northern is one of the biggest supermarket suppliers of own-label products, as well as making Goodfellas pizzas and Fox's Biscuits. Its merger with Greencore, the biggest sandwich maker in the UK, would have created a food supplier called Essenta Food with combined annual sales of £1.7bn.
Mr Boparan, who also owns Harry Ramsden's fish and chips chain, plans instead to merge Northern into his 2 Sisters business, which supplies raw and prepared chicken products to supermarkets, with brands such as Buxted Original.
Last night, Mr Boparan said: "The combined group will be one of Britain's major food suppliers with a turnover of more than £2bn. This will create significant opportunities which will benefit customers, consumers and employees."
Northern first admitted it had received an approach from Mr Boparan last month, prompting the panel to issue a "put up or shut up" deadline for Mr Boparan to table a firm bid or walk away before Northern and Greencore shareholders voted on their proposed merger at the end of January.
The board finally accepted Mr Boparan's improved bid last night just before 7pm, after the original 5pm bid deadline was extended two hours. Northern shares closed up 4 per cent at 63p yesterday.
City sources had speculated that Mr Boparan could have to take on £300m debt to seal the deal, and negotiations were also complicated by Northern's pension fund deficit, which at £140m has weighed on the company's shares.Reuse content